Cullen attacks CGT critic

I blogged over the weekend the critique by Troy Bowker on the unreliaiblity of the data proponents of a CGT have used to argue it will only affect a few rich pricks.

Dr Cullen has responded with a very political attack on Bowker’s column. Cullen is getting paid $1,000 a day to attack critics! Amazing.

Even more interesting is how much Cullen plays the man, not the ball, and ignores the details Bowker used. Let’s go through his response.

“Troy Bowker’s claims in today’s Business Herald about the reliability of data used by the Tax Working Group lack credibility”, says the Chair of the Group, Sir Michael Cullen.

This ignores the TWG’s own officials included disclaimers about the reliability of the data.

“Boiled down to its essence, his argument rests on one simple point: the data is derived from the Household Economic Survey (HES) which is a sample survey of households.
“Mr Bowker seems to believe a sample size of 8,000 is a small size on which to base conclusions. In fact this is a sample size some eight to ten times that of the main political polls. It has a high degree of accuracy.

Dr Cullen is conflating the overall sample size with the sample size for responses to particular questions. He specifically doesn’t address the fact highlighted by Bowker that 20 of the 50 categories have sampling errors of greater than 20%.

Here’s an example. Let’s say you have 8,000 households in the survey. But only 1% of them are farmers. Then the survey has only 80 responses from farmers so any data about the value of farms is based on 80, not 8,000 responses.

“In so far as it may provide an inaccurate picture around wealth distribution it is likely to be an underestimation of the assets of the very wealthiest, something which does not help Mr Bowker’s case at all.

Dr Cullen gives no basis for his assertion that it is an underestimation. And Bowker in his original column pointed out the survey is based on people’s estimates. They may over or under-estimate.

“Mr Bowker does not help his argument by describing the CGT proposal as a ‘Labour’ one. In fact it comes from a clear majority of the Tax Working Group – a group of experts drawn from a wide variety of views.

Splitting hairs. Labour campaigned on a CGT and appointed a former Labour Finance Minister to chair it. They also appointed the members, knowing what some of their views were. And despite all that the overall CGT was still opposed by three of the members, and many key elements only passed on a narrow 6:5 vote.

“Finally, Mr Bowker continues to argue, like so many speaking for high net wealth individuals, as if only those people are hard working ordinary Kiwis.

Here he plays the man, not the ball, and asserts Bowker is speaking only for high wealth individuals. In fact Bowker was explicitly saying that many hard working Kiwis will be impacted by a CGT, even though they are not wealthy.

“The great advantage of the HES is that it gives us the most complete and available picture of the wealth of all Kiwis – including the many who have little wealth apart from their family home”, Sir Michael said.

But Dr Cullen’s CGT will impact those who have little wealth apart from the family home. If you have a home office you get impacted. If you take more than a year to build your new house you get impacted. If you have a lifestyle block etc etc.

Dr Cullen is effectively being paid $1,000 a day to act as a press secretary for Grant Robertson.